[Kirby64]

Are you ignoring the cost of coffee and milk? Even modestly priced coffee ($14/12oz) ends with each shot being roughly $0.75 in just ground coffee. No idea what milk costs for you since pricing can be so variable, but in actual raw components you can quickly get above $1 purely in cost of goods. Even easier if you're drinking expensive or special stuff. Expensive coffee truly can have raw material cost exceeding $4/cup, although it would be unusual to use that in a latte.